“The fourth quarter played out largely as expected as we continued to execute through a challenging environment,” CEO Paul Otellini said in a statement.

Looking ahead, Intel projected first-quarter revenue of $12.2 billion to $13.2 billion, compared with the Street’s view of $12.9 billion. Gross margins are seen at 58%, plus or minus a couple of percentage points.

For the full year, Intel sees a low single-digit percentage increase in revenue and gross margins at 60%, plus or minus a few percentage points. Full-year capital spending is expected to range between $12.5 billion and $13.5 billion.

“As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing,” Otellini said.

Intel's fourth-quarter results were hurt by a 6% year-over-year drop in PC client revenue to $8.5 billion. The chip maker’s other architecture group posted revenue of $1 billion, representing a 7% decline from the year before and a 14% tumble from the third quarter.

On the upside, Intel’s data-center group generated 6% year-over-year revenue growth to $8.5 billion. That marked a 1.5% sequential dip.

Santa Clara, Calif.-based Intel initially rallied about 2% in after-hours trading but then headed south. In recent trading, Intel was off 1.54% to $22.33.